There are few countries as notorious in the crypto industry as North Korea. In this case, it’s not because the government is very anti-cryptocurrency, but because it allows national hacking groups to steal cryptocurrencies on a massive scale from unsuspecting users. The South Korean government is done with that and is considering action.
South Korea wants to freeze cryptocurrencies for security reasons
This is what the South Korean business newspaper JoongAng Daily writes based on various anonymous sources within the South Korean government. The plan is to track and freeze North Korean crypto wallets.
According to one of the sources, this is in line with previous decisions by President Yoon Suk Yeol, who believes the country’s cybersecurity measures are not good enough. The previous government would have allowed security measures to deteriorate so as not to anger North Korea. The National Intelligence Service (NIS) had a similar proposal back in November 2022.
Some of the stolen tokens are also being laundered through South Korean crypto exchanges. According to estimates, this amount was already more than 52 million US dollars last year.
North Korea is said to have stolen more than $1 billion in cryptocurrencies by 2022 alone. According to JoongAng Daily, measured over the past five years, it’s even 3 billion dollars.
Theft of bitcoins for nuclear weapons
North Korea uses the stolen capital for the development and production of nuclear weapons, with which it has already threatened the USA and Japan, among others. This was one of the reasons why the US government decided to sanction the crypto mixer Tornado Cash, which was allegedly used extensively by North Korean hacking groups like the Lazarus Group.
The government is talking about coin freezing, but not in all cases authorities can directly freeze coins – after all, not all public blockchains allow this. Therefore, the reality will largely be about blacklisting wallet addresses.
But today, censorship on Ethereum (ETH) is largely possible thanks to a software upgrade for validators. US stablecoin issuers are also required to freeze coins if the government requests it.